USDA To Aid ChemChina’s Syngenta AG (ADR) Deal Review By American Panel: Reuters

The U.S. Department of Agriculture (USDA) has agreed to join the American government panel that is reviewing state-owned ChemChina’s planned $43 billion acquisition of Swiss seeds and pesticide maker Syngenta, people familiar with the matter said Monday. The move will subject the deal to additional government scrutiny. It came after lawmakers wrote to Treasury Secretary Jacob Lew in March to ask that the USDA be involved in the review so that the potential impact of the transaction on domestic food security could be better assessed.

Lew chairs the Committee on Foreign Investment in the U.S. (CFIUS), which assesses deals for potential national security threats and is made up of representatives from 16 U.S. agencies, including the Treasury, Homeland Security and Defense departments.

The sources asked not to be identified because the USDA’s role in CFIUS has not been publicly disclosed.

The Treasury Department declined to comment, with a representative saying: “By law, information filed with CFIUS may not be disclosed by CFIUS to the public. Accordingly, the department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review.”

A USDA representative also declined to comment, citing the same reasons.

Syngenta declined to comment. A representative of China National Chemical, also known as ChemChina, did not immediately respond to a request for comment.

While the USDA is not one of the agencies constituting CFIUS, there is precedent for it joining in the review of a deal. In 2013, CFIUS cleared the way for China-based Shuanghui International Holdings to buy U.S. meat company Smithfield Foods with the USDA’s participation.

Syngenta said this year it would make a voluntary filing with CFIUS for its deal with the Chinese state-owned firm “even though no obvious national security concerns were identified during due diligence.”

Unveiled in February, the deal is the largest foreign acquisition ever by a Chinese company, as China is looking to secure food supplies for its population.

Syngenta, generating almost one-quarter of its revenue in North America, is the biggest seller of pesticides on the continent and also is a key player in seeds. With U.S. headquarters in North Carolina, it also has other facilities there, as well a presence in California, Delaware, Iowa and Minnesota, among other states.